I am a senior editor at Forbes, covering legal affairs, corporate finance, macroeconomics and the occasional sailing story. I was the Southwest Bureau manager for Forbes in Houston from 1999 to 2003, when I returned home to Connecticut for a Knight fellowship at Yale Law School. Before that I worked for Bloomberg Business News in Houston and the late, great Dallas Times Herald and Houston Post. While I am a Chartered Financial Analyst and have a year of law school under my belt, most of what I know about financial journalism, I learned in Texas.

Inside The Koch Empire: How The Brothers Plan To Reshape America

"We get threats from people in Congress, and this is pushed out and becomes part of the culture: That we are evil so we need to be destroyed." - Charles Koch (Photo: Jamie Kripke for Forbes)

A man who, by FORBES’ careful measure, is one of the 50 most powerful people in the world, one of the 20 wealthiest–and one of the dozen most vilified–is perpetually in a position to reflect. But given it’s Charles Koch’s 77th birthday, the calendar demands it. Especially with the presidential election that Charles has called “the mother of all wars” less than a week away, and with Koch Industries, the firm he has built into the second-largest private company in America, considering several more big acquisitions, including an 18,000-employee automotive glassmaker, Guardian Industries.

Yet despite all these momentous events swirling around his wood-paneled Wichita office, decorated with seascapes and looking out on to the prairie to the north, the legacy he wishes to initially address comes via a piece of paper with a color photograph of his first grandson. The baby’s name: Charles. “My proudest accomplishment,” he smiles.

Given that he and his brother have been called “pigs” (by MSNBC host Chris Matthews) and protesters have unfurled “Koch Kills” banners at rallies, Charles clearly wants to use this rare interview to humanize himself, attaching some personal substance to his courtly Midwest manner. Yet this grandfatherly presence, framed by an unbuttoned collared shirt and a toothy grin, is at odds with the business and political juggernaut that he and his younger brother David have built in a systematic process befitting their MIT training.

Charles’ many critics on the left–including the President of the United States–accuse him of accumulating too much power and using it to promote his own economic interests through a network of secretive organizations they call the “Kochtopus.” Ironically, the Koch brothers believe they’re fighting against power, at least in the political realm. For the Kochs the real power is central government, which can tax entire industries into oblivion, force a citizen to buy health insurance and bring mighty corporations like Koch Industries to heel.

“Most power is power to coerce somebody,” says Charles, in a voice that sounds like Jimmy Stewart with a Kansas twang. “We don’t have the power to coerce anybody.”

The November elections–which David, in a separate interview shortly after the results were finalized, termed “bitterly disappointing”–seem to confirm Charles’ last point. Not even the Koch brothers, who spent tens of millions of dollars during this election cycle (they won’t disclose the exact amount) funding direct political contributions and issue-driven “nonprofits,” could coerce voters to back their candidates. Mitt Romney’s loss was a huge blow to them, both in terms of likely policy outcomes and personal reputation.

But those who think the brothers, older and chastened, will now fade away don’t understand the Kochs. Not a bit. Obama’s victory was just a blip on a master plan measured in decades, not election cycles. “We raised a lot of money and mobilized an awful lot of people, and we lost, plain and simple,” says David. “We’re going to study what worked, what didn’t work, and improve our efforts in the future. We’re not going to roll over and play dead.”

The goal has always been, Charles says, “true democracy,” where people “can run their own lives and choose what they want to buy, choose how to spend their money.” (“Now in our democracy you elect somebody every two to four years and they tell you how to run your life,” he says.) Both Kochs innately understand that–unlike the populist appeal of their fellow midwestern billionaire Warren Buffett and his tax-the-rich advocacy–their message of pure, raw capitalism is a much tougher sell, even among capitalists.

So their revolution has been an evolution, with roots going back half a century to Koch’s first contributions to libertarian causes and Republican candidates. In the mid-1970s their business of changing minds got more formal when Charles cofounded what became the Cato Institute, the first major libertarian think tank. Based in Washington, it has 120 employees devoted to promoting property rights, educational choice and economic freedom. In 1978 the brothers helped found–and still fund–George Mason University’s Mercatus Center, the go-to academy for deregulation; they have funded the Federalist Society, which shapes conservative judicial thinking; the pro-market Heritage Foundation; a California-based center skeptical of human-driven climate change; and many other institutions.

All of these organizations, unknown to 99% of the population, and their common source of support, unknown to most of the rest, have provided the grist for conservative thinking since Reagan. It’s a measure of Koch’s success that 40 years after Richard Nixon was stumping for national health insurance, Paul Ryan’s Ayn Rand-tinged economics are just a little right of center. That the Supreme Court’s conservative majority led by Chief Justice John Roberts has issued a number of pro-property rights, anti-government decisions in recent years that read like they came straight out of a Federalist Society position paper. That when George W. Bush sought a watchdog on regulation costs, he appointed a top Mercatus executive. And none of this was accidental–it just took millions of dollars over decades of time. You can see the same process at work in David’s quest to find a cure for cancer. A prostate cancer survivor like the rest of his brothers, he has given $215 million to fight the disease so far, including $100 million to fund his own research center at MIT.

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ha ha ha …. good point, Daniel. There are many “forces” at work in our electoral and political processes. This merely features one very unusual force to be reckoned with. If people wouldn’t get so hysterical and simply try to understand their core philosophy, where it comes from, its historical perspective, etc … people could better understand how interesting this story really is. Just think how things might be if we didn’t have their voices in the American discourse to balance out the other side of the coin and the money and power that is wielded. No simple spin on this topic. Ever. After reading many articles about the Koch’s that clearly had an axe to grind, this one is actually the most informational … in my opinion.

The fact that Koch sponsored candidates pretty uniformly lost their Senatorial and Presidential races does not change the fact that Koch-sponsored politics have shifted the political landscape in the US away from environmental protection, etc. (the Overton window, if you will). While past Republican Presidents like Nixon enacted Clean Air and Clean Water Acts, and created the EPA, the current Republican party is pretty well united in opposition to environmental regulation (and pretty much every other kind of regulation too, witness Republican rejection of the Rights of the Disabled treaty, even though it only codifies current US law in a larger scope). The Koch bank-roll largely created the Tea Party, so there is some poetic justice in the Koch’s millions creating a SNAFU which blew up in their face by nominating extreme and un-electable candidates. The interesting question is to ponder the counter-factual alternative, what would the 2012 elections have looked like absent the Koch’s and Adelson’s hundreds of millions of dollars. You claim the Times was “wrong”. But given that the Koch’s refuse to allow any transparency about their contributions, why should their assertions about the amounts they contribute be treated as if they are facts rather than simply unsubstantiated assertions?? Using assertions from partisan actors with obvious self-interest with no independent verification would seem like poor journalistic ethics to me.

perhaps you should be listening to the news coming out of Washington today that the White House is unilaterally coming down with a monumental number of new environmental regulations. There is talk of it being somewhat akin to ratifying the Kyoto treaty without going to Congress. Please don’t be fooled, there are very powerful forces on the left that pull equally hard on the political rope.

Obviously you haven’t heard of Keystone and the large numbers of persons and businesses exiting California because of all this spurious environMentalism.

Koch and his family do not advocate for causes that take money out of our pockets like big bloody government. Less government means less government theft of the public’s financial resources.

Government can take as much of your money as it pleases for generally the most worthless of pursuits. Private business can do no such thing, unless of course it prods government into regulating its competitors out of the market. And how Obama bends to those rotten business people and unions.

Thank God for the Kochs. As big as they are, it would not take much for a peevish thug like Obama and his Chicago gang, armed with the full resources of the nation, to bring them down.

Despite this poster’s problem with language, he makes some legitimate points.

Citizens United was decided by the Gang of Five which owes no small debt to the Kochs for their appointments. Scalia and Thomas have met secretly with the Kochs, for instance. CU unleashed the tidal wave of contributions that dominated our recent presidential election.

However, their influence on “down ticket” races is substantial as well. In Kansas the Kansas primary, this year, the Kochs drove eight of ten targeted Republican state senators from office, replacing them with a collection of loons and racists, and retaining others, such as anti-evolutionist Steve Abrams, the man who made a wholly unqualified Koch lobbyist the Commissioner of Education in 2005.

In “Koch Brothers Exposed,” Robert Greenwald even traces their domination of a school board race in North Carolina.

Its not a theory Dan its a fact plain and simple. This election was won only because Obama was liked and trusted more then Romney and people saw what the GOP and the (Koch brothers) TP wingnuts who was formed to stop goverment period. And people saw how much money that Koch & friends were giving Carl Rove & Mitt Romney`s super pacs not to mention thier own super pacs. Dumping millions in wis. too bust the unions. And the millions they spent in 2010 to get all the rightwing nut A holes into office to push thier agenda and to stop anything from happening in DC all for thier own greedy self intrest not the countrys. Come on when Bush needed a watch dog who gave him the dog? when they wanted to put unlimited amouts of money in the game just invite some SC judges on a paid speaking holiday with all the other rich racist rightwingers who hate goverment and lets do it in secret and will give Thomas`s wife 600,000 dollars to have her own little tea party. Look the rightwiingers have been puting far rightwing in state gov. and judges in the state & federal courts for the last 40yrs to take away your rights and give them to the big corporations. Lets be real here they only want goverment and middleclass taxes to pay for jails, cops, defense, oil spills, polluted rivers and streams after thier done ya know things like that but they must be contracted out after all they gotta make thier money. Scumbags like Romney the Kochs the Waltons just to name a few have put alot of time and money in thier agenda to make all the rules pay you what they want and reep all the fruit. Its just most people thought you were crazy if you told them what thier true agenda really was 5,10, 20yrs ago i guess they don`t think i`m crazy now HUH!

One of the things that I like about this article is how it emphasizes the Koch long-long-range perspective and their vigilance to their core philosophy. I worked there for a long time and I know that this is very accurate.

If you are hiding behind laws that shield you from this disclosure, while also arguing you believe in transparency, then your entire position is weakened. There is at least one fairly major point in your philosophy that is at direct odds with your actions–is this an aberration, an exception? Or is it the norm, and you’re just better at hiding the rest? If you don’t practice what you preach, then why should I listen to anything else you have to say?

Spend as much money on ads or whatever else you want spreading whatever message you want–I agree that that is Constitutionally protected free speech. However, if you aren’t willing to attach your name to what is being said, out of fear, then maybe it’s not the best thing to be saying in a public forum.

There is a place for privacy–and that’s for cases such as a whistle-blower, anonymous crime tips, etc. You know, where you’re serving a good where there is a credible threat of physical retaliation against you as a direct result of that message. It’s not there so that you can have someone else spread lies or deceit for the purpose of political gain (again–NOT specific to Koch brothers, as it was used to a significant degree by both major parties this election, but if you’re in favor of transparency then BE transparent).